Isn't the console market LESS tolerant to DRM? I mean, given where DRM started, and how games like Diablo and Sim City STILL sold huge amounts, given how it's far more prominent overall in the PC market than console, they'd be leaving their more tolerant market behind.

No, they're more tolerant. Backwards compatibility (or lack thereof) is a form of DRM. Entering a code to play the online portion of a game is a form of DRM. Having to sync with your PSN or XBL account to play downloaded games is a form of DRM. Being restricted on how many consoles you can download your content to (PSN) or having to call customer support simply to transfer over your content (WiiU) is a form of DRM. Online servers being taken offline and making multiplayer impossible (Halo 2) is a form of DRM. The thing is, console gamers don't rage against these things like PC gamers do, and often PC gamers will simply hack the game, make an unofficial patch, or make their own servers. Console gamers don't have the option to do this.

DRM works better on consoles and it is more user friendly, because even the disc format is a type of DRM, since you can't simply make backups of your games and play them off burned DVDs.

Game makers want to eliminate piracy as best they can. Consoles offer a lot of hassle-free DRM options that PCs don't offer, and most of the console fanbase is less...shall we say..."capable" of pirating games compared to PC gamers.